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Making The Business Case For VoIP & IP Telephony

By Lawrence Imeish, Dimension Data


What do you think when you hear the terms VoIP and IP telephony? Some may use these terms interchangeably, but they are in fact different technologies. VoIP describes the actual method of transmitting voice over an IP network; IP telephony (IPT) describes telephony devices that use IP as the native transport for voice and call signaling. IP telephony needs VoIP to send calls over the network; VoIP does not need IP telephony. An IP network that supports voice (telephony), video, and data with proper quality of service features is also referred to as a converged network. Now that we are all on the same page, we can move onto the business justifications and deployment scenarios for both.

There is no doubt that VoIP is here to stay, so chances are you are probably contemplating a migration if not now, then potentially in the near future. The important part to consider is that your business has many options for a deployment strategy, and your business drivers should dictate which you exercise.

This article will help you with your decision: When should you implement VoIP and IP telephony, and what steps should you consider when making the upgrade?

The first step in determining if IPT and VoIP are right for your company is to understand what potential benefits a converged network provides and factor them into your ROI calculations.

At first, hard cost savings were the primary business drivers behind VoIP. These savings include reduced toll charges from long distance, conference bridges, and PSTN service providers as well as capital and operational savings from utilizing shared resources for multiple sites and reducing administration tasks. For example, a Virginia-based client with a development center in Asia recently recognized a $40K/month savings on long distance, which helped pay for the new system. And while cost savings are still key drivers in converged network deployment, other benefits are fast becoming equally as compelling and should not be ignored, such as employee productivity, employee retention, and office real estate savings.

VoIP and IP telephony increase employee productivity by literally changing the way your company does business. Companies that deploy a converged network gain the benefits of virtualization; an employees physical location becomes irrelevant and tasks can be distributed to anyone, anywhere on a converged network with very little cost or effort. Complimentary technologies such as unified messaging can deliver e-mail, voice mail, and faxes to a single source, creating a truly cohesive communication experience.

VoIP also offers resiliency and business continuity, which TDM telephony systems simply cannot; this is because VoIP is based on IP, so it leverages the decentralized nature of IP networks. Call Processing Controllers can be geographically dispersed and clustered for failover. A properly designed and deployed IP telephony network could easily roll calls over to another office during an emergency. Employees can even work from their homes if necessary and utilize an IP softphone and a VPN connection to give them almost all of the functionality they enjoy at their desks.

An important differentiator between IP phones and their TDM predecessors is the fact that the IP phone is not just a phone it is an informational device offering a host of new and integrated applications that are accelerating return on investment and facilitating collaboration. Law firms can now reduce lost billings by utilizing an application that meets requirements like call tracking, billing, and cost allocation. Universities can now allow class registration and post schedules on IP phones. Government organizations are currently using IP phones to receive emergency broadcasted messages right to their screens, speeding up response times. Schools are using them to take student attendance more quickly, and hotels are using them to check in/out hotel guests more efficiently. The ability of these new applications to offload work from people and PCs means that companies gain process efficiencies, which translate into measurable cost savings.

The next step is to understand where in the cycle of your current telephony infrastructure you are, and what possible upgrade opportunities are approaching. Questions to consider are:

Q. How long is the lease on my current telephony system (PBX, etc.)?

A. If you just purchased or leased a PBX in the last year, then a full-blown IPT deployment may not be for you.

Q Will we be relocating or opening a new office in the near future?

A. A converged voice and data network is a perfect fit for office moves, not only does it cut down on the required cabling, but it makes the upgrade to IPT easier because users are already expecting new things at the new office.

Q. Are there any features that IP telephony provides that will benefit the business and are not currently available on the current TDM telephony platform?

A. Government-mandated business continuity or company-wide initiatives for telecommuting are very powerful IP telephony drivers.

Building The Foundation And Minimizing ROI Costs
Whether or not you are ready to implement a converged network right now, odds are you will in the coming years. Consider this possibility with every networking purchase, and you will reduce the cost of tomorrows converged voice and data network today. For example, if youre in the process of buying new routers for your remote branches, make sure those routers are easily upgradeable to also serve as a voice gateway. If you need a new Ethernet switch, make sure it supports Power over Ethernet (PoE). Usually the cost difference between a PoE Switch versus a non-PoE switch is minor, and these upgrades are not generally used in the final ROI calculations as your organization needed them anyway. If your company insists on using these upgrades in the calculation, then only the delta between a base router or switch and an integrated router or POE-enabled switch should be used. Including the cost of existing hardware support in your calculations makes a strong case for upgrading. If youve depreciated the cost of your router and it is essentially free, remember to add in the cost of support when calculating ROI. An old router that adds $7,500 in support charges each year isnt really free.

The final cost to add to your ROI model is the cost of the call processing, IP telephony handsets and voice gateways, as well as the services for designing and deploying the new network. Usually at least 50 percent of cost is made up by the handsets, and the rest by the support infrastructure.

Assess Your IT Environment
When developing a business case for IP-based communications, a readiness assessment is very important. It provides many important details regarding the current state of your network and its ability to support VoIP. If done correctly it gives you a clear understanding of what network elements are ready for converged communications, which need upgrading, and which need to be replaced. A good assessment will make your budgeting and forecasting more accurate and ultimately result in a better deployment.

The best converged IP networks came about through thoughtful planning and a gradual, sensible migration. Companies with multiple offices where LAN infrastructure currently does not support IP telephony can start with VoIP between offices on their WAN, while still using their existing PBXs and handsets. This allows them to quickly reap the rewards of toll bypass and reduce long distance chargeswithout requiring a complete revamp of their network. Then, as the LAN is upgraded to meet the requirements of a converged network, they can systematically phase in IP telephony at remote offices and headquarters and build on their existing VoIP WAN. The most important part of any IP telephony migration or VoIP deployment is integration with existing TDM devices.

Whether its the CEOs favorite conference phone, or a PBX in a closet, a migration plan must take into account the challenges of a temporary interconnection between the IP and TDM worlds. This is where choosing the right solutions provider becomes critical. Many providers can design and deploy a pure IP telephony network; very few providers have the technical skills, project management experience and successful track record to implement phased deployments. Just as important as the design and deployment, an ROI calculation must also take into account ongoing support. The most desirable scenario is one where the people that designed and deployed your IP telephony network also support it. This eliminates the opportunity for finger pointing or deflecting responsibility. Your ROI calculations will not do you any good if it is 9 a.m. on Monday, and your network is down and you have no one to call. You must evaluate how reliable a partners support solution will fit into your companys worst-case scenarios.

Have A People Plan
Whether you want to do a gradual implementation or a forklift and replace depends upon your circumstance either scenario is plausible. Regardless of which you choose, your plan needs to consider the human factor, since a converged network is as much about business processes and the people using the system, as it is about technology. The users will need to be trained before they are migrated; this cost should be considered in your calculations. A good deployment plan takes training into account from the beginning. The better trained the users are the more likely they are to use the advanced features of the IP phone and the more benefits realized by your organization. Finally, a deployment will affect your support groups; no longer will the data and voice teams work independent of one another. The combining of these two groups centralizes all of the networking and voice skills and creates an environment of valuable knowledge transfers, making each member twice as valuable to the organization. IT

Lawrence Imeish is solutions architect at Dimension Data, a services and solution provider that helps clients plan, build, and support their IT infrastructures. For more information, please visit the company online at

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